The Impact of Price Rising of Household Paper on the Economy

Tissue paper refers to all kinds of sanitary wipe paper used for taking care of personal homes, going out, etc., including roll toilet paper, removable toilet paper, boxed tissue paper, pocket tissue paper, handkerchief paper, napkin, kitchen paper, shoe-shine paper, paper towels and so on. As global food prices continue to surge, individuals and families are facing a new reality. Apart from this, the price of household paper such as paper towel, napkins, and toilet tissues is increasing as well.

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We all know that all paper products are wood converted into pulp and finally processed to get our current paper products. In 2011, the pulp and paper industry experienced the highest price in more than 30 years. Inflation trend experts in the industry are expected to continue into 2011, but record prices climb in 2015 surpassing the previous peak. Again, we see high pulp and paper prices[1]. Paper-making industries rely on wood pulp and due to the rising expenses, the cost of the common tissue paper is equally increasing. The manufacturers are transferring the production cost burden to the customer. According to Economics Editor Jessica Irvine from the Advertiser, the costs of basic household necessities – electricity, petrol, vegetables and the like – have risen at more than twice the rate of inflation over the past decade[2]. So, the biggest reason for the rising price of tissue paper is the price of raw materials caused by the pulp. In addition, the world is becoming more environmentally conscious, thus leading to an increase in the prices of the wood pulp as it is becoming less available. The demand for paper has also reduced drastically due to advancements in technology and people have started using new solutions thus replacing the use of paper.[3] However, the demand for the basic household paper such as the toilet paper continues to allow the paper manufacturers keep on passing the costs to the consumers.

On the supply side, the supply of the household paper depends on its demand in the economy. If its demand is high, sellers will be willing and able to supply more to the market. However, if its demand were low because of the increase in its price, its supply would reduce because the increased supply of the product would lead to a surplus in the market.[4] The suppliers tend to reduce the supply of papers to market in order to maintain the prices that will ensure profits. A surplus supply is likely to cause a decrease in the paper prices. Nevertheless, due to increased prices in the market, most people are unable to afford the paper and this is greatly affecting the supply as it depends on the consumer’s ability to purchase the product.

In the demand side, a product’s demand depends on its market price (Immelt). Therefore, if the price of household paper were low, most consumers would afford to buy it. Hence, its demand would rise. A reduction in the cost of the household paper means that more people can afford it. However, this might not be possible due to the increased cost of the raw materials and increased cost of production. On the contrary, if the sellers set its price above the market equilibrium, its demand would decrease because the customer would purchase its substitute. [5] The demand for the household paper also depends on the cost and availability of the alternatives. Since if the costs are too high and the substitute costs less, people are likely to go for less costly choices.

In conclusion, the demand for the household paper declines with an increase in its price. The rise in the cost of the paper is as a result of increased cost of the pulp and rising production costs. Mainly, lowering the price of the household paper increases the consumer’s purchasing power. They purchase large quantities of the product increasing its supply in the economy. Although, increased supply in the market may result in surplus supply, thus causing a drop in price. Conversely, pricing the product above the market equilibrium price lowers its demand, as customers will be unable to purchase it. Consequently, its flow in the marketplace will decline. Therefore, sellers should set the price of this commodity at the market equilibrium price to promote its supply in the economy.

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[1]Dejana Dosen. “Pulp and paper price on the rise again?”, 4 May 2017.


[2]Irving Jessica, “Cost of household basics rise at twice cost of infliation.”

[3] Bajpai, Pratima. 2015. Pulp and Paper Industry. Pulp and Paper Industry. Elsevier.


[4] Ball, Madeline K., and David Seidman. Supply and Demand. The Rosen Publishing Group, 2011.


[5] Ball, Madeline K., and David Seidman. Supply and Demand. The Rosen Publishing Group, 2011.

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